The Democratization of Transportation

I had the opportunity to speak yesterday at a conference in L.A. (ACM SIGSPATIAL) and during the Q&A someone asked a good question: “Won’t the benefit of autonomous vehicles largely benefit those who are rich and can afford them?”

It’s a good question, but the answer is resoundingly “No!” – just the opposite in fact.

The vast majority of those investing in autonomous vehicles are not doing so to sell high-end luxury cars to individuals.  Rather, they are investing in autonomous vehicles to deliver “mobility as a service” – fleets of vehicles that can take people from point A to B.  Think Uber without the drivers.  Uber, Waymo, GM’s Maven, BMW, etc. are all focusing on enabling ride-sharing fleets of vehicles.

This will primarily benefit those at the lower end of the income range.

Today it costs me about $40 to take an Uber from the airport to my house.  About 70% of Uber’s cost structure isthe drivers.  What happens when these vehicles are autonomous?  The cost goes to $12.  What happens when the algorithms can easily match me going from the airport to Redmond with the person standing 3 people over who is making the same drive and we’re pooled together (ala UberPool)?  The cost goes to $6.

This will lead to the democratization of Transportation.

Today, people who have money buy expensive vehicles and commute to work by themselves.  People who have less money take the bus or some other form of mass transit.  The former go from point A to point B on a direct route while those that take mass transit often take much longer to get from point A to point B due to an indirect route and multiple stops.  With the democratization of transportation, everyone will be able to go from point A to point B inexpensively and conveniently due to the vast number of autonomous cars that will be on the road.  Even people who are well off will prefer this to driving since they’ll have time to be productive on their commute (do e-mail, watch movies, text, etc.) rather than being engaged in driving during their commute.

Rather than autonomous vehicles primarily benefiting people on the high-end of the income range, autonomous vehicles will benefit everyone – especially those on the lower end of the income range since it will shorten their commutes and decrease their overall cost of transportation.

Something to consider…

About Bryan Mistele

I'm Bryan Mistele, the founder & CEO of INRIX, the leading provider of traffic information, connected car services and transportation analytics. I’m a Microsoft, HBS and UofM alum. Father of two great kids, one lovely wife and a very time-consuming company. Passionate about boating, politics and Christianity.

Posted on November 10, 2017, in Uncategorized. Bookmark the permalink. Leave a comment.

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